Hungarian Draft Law Seeks to Freeze $55 Million for 2011 Budget

Hungary’s government asked Parliament to freeze 12.7 billion forint ($55 million) in spending this year, according to a bill submitted by Economy Minister Gyorgy Matolcsy.

The government has already set aside 40 billion forint that won’t be spent in order to meet budget goals, according to Matolcsy’s bill, which was submitted Nov. 25 and is posted on Parliament’s website.

Hungary’s budget deficit in the first 10 months reached 193.2 percent of a full-year target, the Economy Ministry said on Nov. 7. The government, which officially targeted a deficit of 2.94 percent of gross domestic product this year, forecasts a surplus after effectively nationalizing private pension funds and levying extraordinary taxes on energy, financial, retail and telecommunication companies.

Ministries and other institutions controlled by the government must make 577 billion forint in savings by the end of the year to ensure that the budget deficit is kept in check, Tibor Haag of the Economy Ministry told a parliamentary committee on Oct. 3.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net--Editors:

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